Source: TOI
Context:
The Securities and Exchange Board of India (SEBI) has clarified that listed companies must disclose information about the relatives of promoters, including:
- Spouse’s parents
- Married children’s spouses and their parents
- Entities where these relatives hold over 20% shareholding, even if they do not own shares in the listed company
What is the New Proposal?
- Promoter-related disclosures to be expanded.
- Now, listed companies must also disclose relationships with:
- Promoters’ in-laws (beyond immediate family).
- Entities where such relatives hold beneficial interest or control.
Why is SEBI Doing This?
- Current loophole: Some promoters route money through relatives (like in-laws) or associated entities to avoid RPT scrutiny.
- SEBI wants to plug gaps and ensure all such transactions are reported to exchanges.
- Strengthens protection for minority shareholders.
Related-Party Transactions (RPTs)
- Any deal between a company and its related entities/individuals.
- Includes promoters, directors, relatives, and entities under their control.
- Must be disclosed and, in some cases, approved by shareholders.
